Bitcoin this week bitcoin takes a tumble bitcoin cash comes under scrutiny and thats not all

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Do you think bitcoin is a bubble? Do you think the speculative crypto fever has broken? None of us really knows if this will prove to be the case. But this time feels different. It feels like a bubble. We also began to see a robust supply response. Bitcoin bitcoin this week bitcoin takes a tumble bitcoin cash comes under scrutiny and thats not all were also introduced, allowing investors to short or hedge their holdings for the first time.

Bubbles are complex dynamics. What they all have in common, however, is they require emotion to truly go parabolic. Moreover, the less we understand the object of the bubble, the greater the scope for greed and FOMO to fill in the blanks.

But scrutiny brings knowledge, and knowledge kills bubbles. And over the past few weeks we have started to figure a few things bitcoin this week bitcoin takes a tumble bitcoin cash comes under scrutiny and thats not all.

The supply of crypto tokens is not de facto fixed. If prices hold up, a rush of upside-capping supply is almost a certainty. First, bitcoin is volatile. Third, the exchanges have integrity risk e. I see two ways to play a bitcoin short. First, the longer-term play.

In my experience the smart way to play bubbles is to short when the momentum fades on the first bounce after the fever breaks. So the long-term play is to wait until the momentum in bitcoin this week bitcoin takes a tumble bitcoin cash comes under scrutiny and thats not all bounce attempt has faded and it breaks down out of the bounce channel.

This could come a lot faster in bitcoin because arguably the understanding of the underlying asset is more nebulous and the illusion factor was higher. But you never know. You have to size it small and hope you make the right call on the entry point. Nearer term, the opportunities to short seem cleaner. Here are charts of XBT intraday over the past 31 sessions, and daily, over the past year.

You can see on both charts there is heavy overhead in the 15, area. Going up into that area and then breaking down from it would be a logical trigger for a short. You could then set your stop and position size based on some rule that defines a violation of that pattern e.

The other near-term scenario is where bitcoin tries to get away from you on the downside. Given the faith-based nature of the asset, it is entirely possible that we get very little bounce here, and bitcoin continues to tumble.

The odds of a continuation selloff are high. So this is what you can do. Bitcoin closed at 14, on Friday, after an intra-day low down near 11, If we close below 14, you can short it, betting that the unwind is not over. Again, you have to set a stop that makes sense at that point in time, and size your position accordingly.

And you need to be mindful that it is quite possible bitcoin will trade weaker when the futures maket is open than when it is not. But you should not be afraid to chase. If it is truly a bubble, and the fever has now broken, there is still a lot of potential downside—however viable you might believe the underlying technology to be.

This is not going to end well. The frothiness is so bad that the very wealthy speculators in these cryptocurrencies—all well-connected, highly educated white men in their 20s—are going after small-time investors like Ms. Lomeli, the house cleaner, who is not male, not young and not well connected. There are securities laws from the s, and stringently policed by the Securities and Exchange Commission SEC and other federal agencies, along with the FBI, to keep small-time, unsophisticated investors from speculating their life savings in these rickety investment schemes.

These laws were set up for a very good reason—the Great Depression opened up with a bang when millions of small-time investors lost all their savings in lightly regulated pump-and-dump investment schemes whereby these investors bought shares in these schemes through margin buying. And then they were left holding the bag, left utterly impoverished, when the bubble popped in andwhile the pump-and-dump speculators went laughing all the way to the bank.

The people who will be fleeced out of their money will be the house cleaners like Ms. I hope the SEC and the feds are keeping a close eye on cryptocurrencies, and that they indict the malefactors when the tide goes out.

Something very fishy is going on with these markets. Your email address will not be published. Save my name, email, and website in this browser for the next time I comment. Notify me of follow-up comments by email. Notify me of new posts by email. Skip to content Do you think bitcoin is a bubble? You can be simultaneously bullish on blockchain and bearish on bitcoin. In sum, you have to be extra careful with bitcoin in your sizing and risk management. Bitcoin, intra-day, last 31 sessions Bitcoin, daily, over the past year You can see on both charts there is heavy overhead in the 15, area.

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Updated January 17, Cryptocurrencies have been heavily sold off, amid fresh fears of a major regulatory crackdown in South Korea. It follows a sell-off last week when the idea of a law to ban trading was first raised by the Minister.

Number two by market capitalisation, Ethereum, dropped by more than 25 per cent while Ripple, the number three, dropped by more than 40 per cent.

In total, there are now more than 1, cryptocurrencies being traded in an increasingly crowded space. It is one of the biggest markets for trading cryptocurrencies, with college students and housewives all getting in on the action, stoking fears that it has become a type of gambling addiction. IG's head of research Chris Weston said the surge in bitcoin and other cryptocurrencies was mostly driven by FOMO fear of missing out. However, Mr Weston said the rush to get in is being mirror by a panic to get out as the price of the cryptocurrencies tanks.

In the space of just 10 minutes, five investors put several thousand dollars into a bitcoin ATM in central Sydney to buy more of the cryptocurrency at what they see as discount prices. We've seen the hysteria stage. We've seen the hype stage, and now its come onto the regulators' radars as part of this bigger picture. The crash in prices comes soon after the man widely believed to be the world's savviest investor, Warren Buffet, said "I can say almost with certainty that cryptocurrencies will come to a bad end".

Huge price swings like these also make many question the usefulness of the cryptocurrencies as a medium of exchange. It is hard to agree on a price if it is shifting so remarkably fast. Legislation has passed Parliament that will force cryptocurrency exchanges to disclose details of investors and transactions. Australia's financial crime fighting agency AUSTRAC will be tasked with keeping an eye on trading to try to stop cryptocurrencies from being used for money laundering and financing terrorism.

First posted January 17, If you have inside knowledge of a topic in the news, contact the ABC. ABC teams share the story behind the story and insights into the making of digital, TV and radio content.

Read about our editorial guiding principles and the enforceable standard our journalists follow. You've probably heard her story, what happened in the laneway behind a Kings Cross nightclub.

Now she's speaking publicly for the first time as a warning to others. Would you have coffee in a cemetery or take your kids to play near a family member's final resting place?

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By business reporter Carrington Clarke. Bitcoin prices plunged more than 20 per cent in the biggest sell-off for more than three years. Banks 'unwilling to work' with Bitcoin traders amid regulation concerns.

Buffett plans for the future … and it doesn't involve bitcoin. South Korea flags ban on cryptocurrency trading, rattles market. Bitcoin prices plunged more than 20pc at some points in the past day Other major cryptocurrencies had falls of more than 40 per cent Falls are due to concerns that South Korea will ban cryptocurrency trading. Bitcoin v US dollar exchange rate. We asked if the Bitcoin price drop had affected you. Read the discussion in the comments.

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